EXHIBIT 99
Investor Release
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
07/25/00 Investors: Mary Healy, 630-623-6429
Media: Anna Rozenich, 630-623-7316
McDONALD'S REPORTS GLOBAL RESULTS
OAK BROOK, IL -- McDonald's Corporation today announced global results for
the quarter and six months ended June 30, 2000.
- Diluted net income per common share was 39 cents for the quarter, an
increase of 5%; 8% in constant currencies. For the six months, diluted net
income per common share increased 9%; 12% in constant currencies.
- For the first time, Systemwide sales exceeded $10 billion for a quarter,
increasing 5% for the quarter and 7% for the six months in constant
currencies.
- Revenues increased 8% for the quarter and 10% for the six months in
constant currencies.
- The Company repurchased nearly $1.3 billion of stock during the six
months.
Key highlights - Consolidated 2000 1999 Increase/(Decrease)
Dollars in millions, except As In Constant
per common share data Reported Currencies*
Quarters ended June 30
Systemwide sales $10,237.6 $ 9,920.4 3% 5%
Total revenues 3,560.6 3,407.1 5 8
Operating income 876.3 883.5 (1) 2
Net income 525.9 518.1 2 4
Net income per common share -
diluted .39 .37 5 8
Six months ended June 30
Systemwide sales $19,744.3 $18,743.2 5% 7%
Total revenues 6,904.4 6,442.2 7 10
Operating income 1,644.9 1,595.1 3 6
Net income 976.8 920.8 6 9
Net income per common share -
diluted .71 .65 9 12
* Information in constant currencies excludes the effect of foreign
currency translation on reported results, except for hyperinflationary
economies, such as Russia, whose functional currency is the U.S. dollar.
SUMMARY COMMENTARY
Chairman and Chief Executive Officer Jack M. Greenberg commented,
"McDonald's global food service business delivered good results in the
first six months of 2000 with Systemwide sales increasing seven percent,
revenues increasing 10 percent and diluted earnings per share increasing 12
percent in constant currencies. Second quarter growth was affected by
challenging year-over-year sales comparisons, due to exceptional
performance in several key markets in 1999. However, we remain confident
that we will regain stronger sales momentum in the second half of the year
and improve operating results. This expectation is based on our solid
operating fundamentals, strong marketing and promotional calendars, and
less challenging comparisons in several key markets in the last half of the
year.
"We continue to believe McDonald's stock is undervalued and therefore
have been an aggressive buyer, purchasing about $700 million, or 19.1
million shares, of our common stock in the second quarter. This brought
year-to-date purchases to nearly $1.3 billion and the cumulative purchases
under our $4.5 billion, three-year share repurchase program to $2.5
billion, or 70 million shares."
Jim Cantalupo, Vice Chairman and President McDonald's Corporation
said, "The fundamentals of our business remain very strong. We opened 546
McDonald's restaurants year-to-date and remain on track to add about 1,800-
1,900 this year.
"Europe and the U.S., which together comprise about 80 percent of
operating income, each faced difficult comparisons driven by exceptionally
strong non-food promotions last year. The challenges in Europe were
compounded by unusually hot weather and high television viewership of the
Euro 2000 Soccer Championship, which reduced eating out activity. With
these factors behind us, we expect significant improvement in Europe's
results in the second half of the year.
"In Asia/Pacific, Japan's new value strategy is beginning to gain
momentum. The segment also benefited from outstanding results in China and
South Korea, while Australia's challenging comparisons and a drop in retail
spending hurt results. In Latin America, we have experienced some
improvement in Brazil, although we continue to be adversely affected by
difficult economic conditions in most markets. We remain optimistic that
we will experience improvement as we progress throughout 2000."
Alan Feldman, President McDonald's USA said, "This year's Teenie
Beanie Babies was a terrific Happy Meal promotion, ranking as the fourth
most successful ever in the United States. However, it did not match last
year's exceptional sales level. If it had, U.S. sales would have been up
about five percent for the quarter.
"I'm excited about our second half marketing calendar featuring our
new advertising campaign, 'We Love to See You Smile.' The campaign
highlights six customer service initiatives including: faster, more
accurate drive-thrus; everyday value offerings; tasty new products; a new
system that delivers food 'Hot. Fresh. Just For You!'; a 'Fresh Look' for
restaurants including new painting and landscaping; and better trained and
motivated people. In addition, we have a great line up of promotions. For
example, in August, McDonald's Summer Music Event will offer three new CDs
featuring Britney Spears and *NSYNC, as well as other popular artists. And
later this year, we'll feature a promotion linked to Disney's live-action
movie, 102 Dalmatians. With the improvements we've made in our restaurants
and our strong promotions, we look forward to exciting our customers and
bringing them back again and again."
OPERATING RESULTS
McDonald's operates primarily in the quick-service hamburger restaurant
business. In addition, the Company operates other restaurant concepts:
Aroma Cafe, Chipotle Mexican Grill, Donatos Pizza and, effective May 26th,
Boston Market. Collectively these four businesses are referred to as
"Other Brands." Throughout this release, Other Brands financial
information is included in the Other segment, except where specifically
noted.
Impact of Foreign Currencies on Reported Results
While changing foreign currencies affect reported results, McDonald's
lessens exposures, where practical, by financing in local currencies,
hedging certain foreign-denominated cash flows and by purchasing goods and
services in local currencies.
The primary currencies negatively affecting reported results for the
quarter and six months were the Euro, which is the currency in 11 of our
European markets including France and Germany, the Australian Dollar and
the British Pound. This negative effect was partly offset by the stronger
Japanese Yen in both periods.
Systemwide Sales and Revenues
Systemwide sales represent sales by Company-operated, franchised and
affiliated restaurants. Total revenues include sales by Company-operated
restaurants and fees from restaurants operated by franchisees and
affiliates. These fees include rent, service fees and royalties that are
based on a percent of sales with specified minimum payments along with
initial fees.
On a global basis, the increases in sales and revenues for both
periods were partly due to expansion, and for the six months, also due to
positive comparable sales. Foreign currency translation had a negative
effect on the growth rates for both Systemwide sales and revenues for the
quarter and six months. The stronger Japanese Yen had a greater positive
currency translation effect on sales compared to revenues. This is due to
our affiliate structure in Japan. Under this structure, we record a
royalty in revenues based on a percentage of Japan's sales, whereas all of
Japan's sales are included in Systemwide sales. For this reason, sales
were less negatively affected by foreign currency translation than were
revenues.
On a constant currency basis, revenues increased at a higher rate than
sales in both periods due to the higher unit growth rate of Company-
operated McDonald's restaurants relative to Systemwide restaurants, the
addition of Other Brands and the consolidation of Argentina and Indonesia,
for financial reporting purposes, in the first quarter 2000.
Systemwide sales
Dollars in millions 2000 1999 Increase/(Decrease)
As In Constant
Reported Currencies*
Quarters ended June 30
U.S. $ 5,192.5 $ 5,169.9 - n/a
Europe 2,326.8 2,387.3 (3)% 7%
Asia/Pacific 1,696.3 1,502.3 13 7
Latin America 429.5 402.1 7 10
Other 592.5 458.8 29 30
Total Systemwide sales $10,237.6 $ 9,920.4 3% 5%
Six months ended June 30
U.S. $ 9,697.5 $ 9,453.1 3% n/a
Europe 4,632.5 4,649.1 - 10%
Asia/Pacific 3,481.9 3,013.6 16 10
Latin America 863.6 795.7 9 11
Other 1,068.8 831.7 29 28
Total Systemwide sales $19,744.3 $18,743.2 5% 7%
* Excluding the effect of foreign currency translation on reported results
n/a Not applicable
U.S. sales were flat for the quarter as expansion was offset by
negative comparable sales. If Teenie Beanie Babies sales had equaled last
year's level, U.S. sales would have increased about five percent for the
quarter. For the six months, U.S. sales increased three percent, due to
restaurant expansion and positive comparable sales.
In Europe, expansion, partly offset by negative comparable sales,
drove the constant currency sales increase for the quarter, while expansion
and positive comparable sales drove the increase for the six months.
Strong performances in Italy, the Netherlands and Spain drove the increases
in both periods. France and the United Kingdom also contributed
significantly to the increases for both periods. The segment's sales
growth rate was negatively impacted by difficult sales comparisons in
Germany as a result of successful non-food promotions in 1999, unusually
hot weather and high television viewership of the Euro 2000 Soccer
Championship, which reduced eating out activity.
In Asia/Pacific, the constant currency sales increase for the quarter
was driven by expansion, partly offset by negative comparable sales, while
the sales growth for the six months was driven by expansion and positive
comparable sales. Positive comparable sales in several markets, including
double-digit comparable sales growth in China, and expansion in Japan drove
the segment's sales increases in both periods.
In Latin America, constant currency sales increases for the quarter
and six months were driven by expansion, partly offset by negative
comparable sales. Contributing to the increases were expansion for both
periods and positive comparable sales in Brazil for the six months, and
double-digit comparable sales in Mexico for both periods.
In the Other segment, positive comparable sales and expansion in
Canada and South Africa contributed to the increases for both periods. The
sales increases for the quarter and six months included $106.1 million and
$149.3 million, respectively, related to the addition of Other Brands.
Combined Operating Margins
The following combined operating margin information represents margins
for McDonald's restaurant business only.
Combined operating margins Quarters ended Six months ended
June 30 June 30
2000 1999 2000 1999
Dollars in millions
Company-operated $ 428.2 $ 448.9 $ 831.5 $ 810.0
Franchised 783.6 792.6 1,493.3 1,469.8
Combined operating margins $1,211.8 $1,241.5 $2,324.8 $2,279.8
Percent of sales/revenues
Company-operated 17.3% 18.4% 17.0% 7.6%
Franchised 80.1 81.5 79.4 80.4
Combined operating margin dollars decreased $29.7 million, or two
percent, for the quarter, and increased $45.0 million, or two percent, for
the six months. In constant currencies, combined operating margin dollars
increased by $12.3 million, or one percent for the quarter and $120.7
million, or five percent for the six months. The U.S. and Europe segments
accounted for over 80 percent of the combined margin dollars in both
periods.
As a percent of sales, Company-operated margins decreased for both
periods. Food & paper costs as a percent of sales decreased for the
quarter and increased for the six months, while payroll costs as a percent
of sales increased for the quarter and decreased for the six months.
Occupancy and other operating expenses increased as a percent of sales for
both periods.
In the U.S. and Europe, Company-operated margins decreased as a
percent of sales for the quarter and six months. As a percent of sales in
both segments, food & paper costs decreased, while payroll costs and
occupancy & other operating expenses increased for both periods. In the
U.S., approximately one-half of the second quarter's margin percent decline
was due to the comparison to last year's Teenie Beanie Babies promotion.
Germany, which also faced challenging comparisons due to strong promotions
last year, accounted for half of Europe's margin percent decline for the
quarter.
As a percent of sales, Asia/Pacific's Company-operated margins
decreased for the quarter and increased for the six months. Latin
America's Company-operated margins decreased as a percent of sales for both
periods, primarily due to difficult economic conditions experienced by most
markets, partly offset by the consolidation of Argentina.
Franchised margins as a percent of applicable revenues decreased for
the quarter and six months. The decrease in the margin as a percent of
revenues was primarily due to higher occupancy costs as a result of our
strategy to lease more sites. By leasing a higher proportion of new sites,
we have reduced initial capital requirements. However, as anticipated,
this practice reduces franchised margins since the financing costs implicit
in the lease are included in occupancy expense, whereas for owned sites,
financing costs are reflected in interest expense.
For all segments, excluding Other, franchised margins as a percent of
revenues declined for the quarter and the six months primarily due to
increased occupancy costs. In addition, the consolidation of Argentina and
Indonesia contributed to the decline in margins as a percent of revenues in
Latin America and Asia/Pacific, respectively, for both periods.
Selling, General & Administrative Expenses
Selling, general & administrative expenses increased eight percent for
the quarter and nine percent for the six months. This increase was
primarily due to spending to support the development of Other Brands and the
consolidation of Argentina and Indonesia. Selling, general & administrative
expenses included $14.3 million and $25.2 million related to Other Brands
for the quarter and six months, respectively. Excluding Other Brands and
the consolidations, selling, general & administrative expenses increased two
percent for the quarter and four percent for the six months.
Other Operating Income and Expense
Other operating income and expense consists of transactions related to
franchising and the food service business. Equity in earnings of
unconsolidated affiliates decreased for the quarter primarily as a result
of a gain reported in 1999 on the sale of real estate in a U.S.
partnership. The decrease in other expense was primarily related to lower
provisions for property dispositions in 2000 and costs in 1999 related to
the write-off of software and the implementation of our Made For You food
preparation system.
Other operating income and expense Quarters ended Six months ended
June 30 June 30
Dollars in millions 2000 1999 2000 1999
Gains on sales of restaurant
businesses $22.3 $11.1 $37.9 $22.4
Equity in earnings of unconsolidated
affiliates 33.5 52.2 59.9 73.9
Other (5.1) (55.8 ) (17.8) (75.6)
Total $50.7 $ 7.5 $80.0 $20.7
Operating Income
Consolidated operating income decreased $7.2 million, or one percent,
for the quarter, while increasing two percent in constant currencies. For
the six months, consolidated operating income increased $49.8 million, or
three percent; six percent in constant currencies. The increases, in
constant currencies, were due to higher combined operating margin dollars
and higher other operating income, partly offset by higher selling, general
& administrative expenses. Operating income by segment includes the
allocation of corporate selling, general & administrative expenses.
Operating income Increase/(Decrease)
As In Constant
Dollars in millions 2000 1999 Reported Currencies*
Quarters ended June 30
U.S. $ 443.4 $ 428.4 4 % n/a
Europe 281.5 303.5 (7) 3%
Asia/Pacific 102.5 93.9 9 7
Latin America 23.3 25.7 (9) (8)
Other** 25.6 32.0 (20) (19)
Total operating income $ 876.3 $ 883.5 (1)% 2%
Six months ended June 30
U.S. $ 787.6 $ 743.2 6 % n/a
Europe 543.3 556.3 (2) 8%
Asia/Pacific 215.9 185.2 17 13
Latin America 53.1 57.6 (8) (6)
Other** 45.0 52.8 (15) (16)
Total operating income $1,644.9 $1,595.1 3 % 6%
* Excluding the effect of foreign currency translation on reported results
** Includes Other Brands operating losses of $8.8 million and $17.9 million
for the quarter and six months of 2000, respectively. In 1999, Other Brands
operating losses were $.6 million and $1.3 million for the quarter and six
months, respectively.
n/a Not applicable
U.S. operating income increased $15.0 million or four percent for the
quarter and $44.4 million or six percent for the six months. The increase
for the quarter was driven by lower selling, general & administrative
expenses and higher other operating income, while for the six months, the
increase was due to higher combined operating margin dollars and higher
other operating income.
Europe's operating income increased three percent for the quarter and
eight percent for the six months in constant currencies. Strong results in
France, Italy, Russia and Spain drove this segment's performance in both
periods. Weak results in Germany had a significant impact on the segment's
operating income growth rate.
Operating income in Asia/Pacific increased seven percent for the
quarter and 13 percent for the six months in constant currencies. This
segment benefited in both periods from strong performances in China and
South Korea, while Australia's challenging comparisons and a drop in retail
spending hurt results. In addition, the partial sale of our Japanese
affiliate's ownership in Toys 'R' Us Japan, in connection with an initial
public offering of Toys 'R' Us Japan, contributed to the increase. Japan's
second quarter 1999 results benefited from a lower effective tax rate.
Latin America's operating income decreased eight percent for the
quarter and six percent for the six months in constant currencies. Both
periods were negatively impacted by the difficult economic conditions
experienced by most markets in the region. Increases in Brazil, Mexico and
Venezuela, as well as the consolidation of Argentina, partly offset the
decreases in both periods.
In the Other segment, strong performances in Canada and several other
markets were offset by the investment spending for Other Brands for the
quarter and six months.
INTEREST, NONOPERATING EXPENSE AND INCOME TAXES
For both periods, higher interest expense was primarily due to
significantly higher average debt levels, partly offset by lower average
interest rates and weaker foreign currencies. The higher average debt
levels were a result of the Company using its available credit capacity to
fund share repurchases.
Nonoperating (income) expense reflected a gain related to the sale of
a partial ownership interest in a majority owned subsidiary outside the
U.S. and lower minority interest expense for the quarter and six months.
In addition, nonoperating (income) expense for the quarter reflected
translation gains in 2000 compared with translation losses in 1999.
The effective income tax rate was 32.0 percent for both periods of
2000 compared with 33.0 percent for both periods of 1999.
WEIGHTED AVERAGE SHARES
Weighted average shares outstanding for the second quarter and the six
months were lower compared with the prior year due to shares repurchased.
In addition, outstanding stock options had a less dilutive effect than in
the prior year. During the first six months of 2000, the Company
repurchased 35.7 million shares of its common stock for approximately
$1.3 billion.
FORWARD-LOOKING STATEMENTS
Certain forward-looking statements are included in this report. They use
such words as "may," "will," "expect," "believe," "plan" and other similar
terminology. These statements reflect management's current expectations
and involve a number of risks and uncertainties. Actual results could
differ materially due to the effectiveness of operating initiatives and
advertising and promotional efforts, the effects of the Euro conversion, as
well as changes in: global and local business and economic conditions;
currency exchange and interest rates; food, labor and other operating
costs; political or economic instability in local markets; competition;
consumer preferences, spending patterns and demographic trends; legislation
and governmental regulation; and accounting policies and practices.
MCDONALD'S CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Dollars and shares in millions, except per common share data
--------------------------------------------------------------------
Inc/(Dec)
Quarters ended June 30, 2000 1999 $ %
--------------------------------------------------------------------
SYSTEMWIDE SALES $10,237.6 $9,920.4 317.2 3
Revenues
Sales by Company-operated
restaurants 2,582.0 2,434.1 147.9 6
Revenues from franchised
and affiliated restaurants 978.6 973.0 5.6 1
TOTAL REVENUES 3,560.6 3,407.1 153.5 5
Operating costs and expenses
Company-operated restaurants 2,147.0 1,985.2 161.8 8
Franchised restaurants
--occupancy costs 194.6 180.4 14.2 8
Selling, general &
administrative expenses 393.4 365.5 27.9 8
Other operating (income)
expense (50.7) (7.5) (43.2) n/m
Total operating costs
and expenses 2,684.3 2,523.6 160.7 6
OPERATING INCOME 876.3 883.5 (7.2) (1)
Interest expense 106.2 97.5 8.7 9
Nonoperating (income) expense (2.9) 13.2 (16.1) n/m
Income before provision
for income taxes 773.0 772.8 0.2 -
Provision for income taxes 247.1 254.7 (7.6) (3)
NET INCOME $ 525.9 $ 518.1 7.8 2
NET INCOME PER COMMON SHARE $ 0.40 $ 0.38 0.02 5
NET INCOME PER
COMMON SHARE-DILUTED $ 0.39 $ 0.37 0.02 5
Weighted average common
shares outstanding 1,327.1 1,355.5
Weighted average common
shares outstanding-diluted 1,365.5 1,405.6
n/m Not meaningful
MCDONALD'S CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Dollars and shares in millions, except per common share data
---------------------------------------------------------------------
Inc/(Dec)
Six months ended June 30, 2000 1999 $ %
---------------------------------------------------------------------
SYSTEMWIDE SALES $19,744.3 $18,743.2 1,001.1 5
Revenues
Sales by Company-operated
restaurants 5,021.9 4,613.2 408.7 9
Revenues from franchised
and affiliated restaurants 1,882.5 1,829.0 53.5 3
TOTAL REVENUES 6,904.4 6,442.2 462.2 7
Operating costs and expenses
Company-operated restaurants 4,180.1 3,803.2 376.9 10
Franchised restaurants
--occupancy costs 388.4 359.2 29.2 8
Selling, general &
administrative expenses 771.0 705.4 65.6 9
Other operating (income)
expense (80.0) (20.7) (59.3) n/m
Total operating costs
and expenses 5,259.5 4,847.1 412.4 9
OPERATING INCOME 1,644.9 1,595.1 49.8 3
Interest expense 206.6 202.7 3.9 2
Nonoperating (income) expense 2.6 18.9 (16.3) n/m
Income before provision
for income taxes 1,435.7 1,373.5 62.2 5
Provision for income taxes 458.9 452.7 6.2 1
NET INCOME $ 976.8 $ 920.8 56.0 6
NET INCOME PER COMMON SHARE $ 0.73 $ 0.68 0.05 7
NET INCOME PER
COMMON SHARE-DILUTED $ 0.71 $ 0.65 0.06 9
Weighted average
common shares outstanding 1,335.3 1,356.4
Weighted average common
shares outstanding-diluted 1,374.2 1,407.1
n/m Not meaningful
MCDONALD'S CORPORATION SYSTEMWIDE SALES
Dollars in millions
-----------------------------------------------------------------------
% Inc/(Dec)
Quarters ended June 30, 2000 1999 As Constant
Reported Currency*
-----------------------------------------------------------------------
US
Operated by franchisees $ 4,071.0 $4,044.8 1
Operated by the Company 798.3 807.0 (1)
Operated by affiliates 323.2 318.1 2
5,192.5 5,169.9 - n/a
Europe
Operated by franchisees 1,278.1 1,289.2 (1)
Operated by the Company 932.9 975.8 (4)
Operated by affiliates 115.8 122.3 (5)
2,326.8 2,387.3 (3) 7
Asia/Pacific
Operated by franchisees 442.0 426.1 4
Operated by the Company 424.4 393.7 8
Operated by affiliates 829.9 682.5 22
1,696.3 1,502.3 13 7
Latin America
Operated by franchisees 224.5 197.6 14
Operated by the Company 179.7 121.0 49
Operated by affiliates 25.3 83.5 (70)
429.5 402.1 7 10
Other**
Operated by franchisees 335.6 300.9 12
Operated by the Company 246.7 136.6 81
Operated by affiliates 10.2 21.3 (52)
592.5 458.8 29 30
Systemwide
Operated by franchisees 6,351.2 6,258.6 1
Operated by the Company 2,582.0 2,434.1 6
Operated by affiliates 1,304.4 1,227.7 6
$10,237.6 $9,920.4 3 5
* Excluding the effect of foreign currency translation on reported
results.
** The Other segment includes $111.8 million of sales in 2000 and $5.7
million in 1999 related to Other Brands.
MCDONALD'S CORPORATION SYSTEMWIDE SALES
Dollars in millions
-----------------------------------------------------------------------
% Inc/(Dec)
Six months ended June 30, 2000 1999 As Constant
Reported Currency*
-----------------------------------------------------------------------
US
Operated by franchisees $ 7,597.0 $ 7,391.3 3
Operated by the Company 1,500.2 1,475.2 2
Operated by affiliates 600.3 586.6 2
9,697.5 9,453.1 3 n/a
Europe
Operated by franchisees 2,547.4 2,521.7 1
Operated by the Company 1,850.4 1,887.4 (2)
Operated by affiliates 234.7 240.0 (2)
4,632.5 4,649.1 - 10
Asia/Pacific
Operated by franchisees 907.3 850.7 7
Operated by the Company 895.6 763.6 17
Operated by affiliates 1,679.0 1,399.3 20
3,481.9 3,013.6 16 10
Latin America
Operated by franchisees 449.1 388.9 15
Operated by the Company 358.5 240.4 49
Operated by affiliates 56.0 166.4 (66)
863.6 795.7 9 11
Other**
Operated by franchisees 629.1 545.9 15
Operated by the Company 417.2 246.6 69
Operated by affiliates 22.5 39.2 (43)
1,068.8 831.7 29 28
Systemwide
Operated by franchisees 12,129.9 11,698.5 4
Operated by the Company 5,021.9 4,613.2 9
Operated by affiliates 2,592.5 2,431.5 7
$19,744.3 $18,743.2 5 7
* Excluding the effect of foreign currency translation on reported
results.
** The Other segment includes $159.2 million of sales in 2000 and $9.9
million in 1999 related to Other Brands.
MCDONALD'S CORPORATION TOTAL REVENUES
Dollars in millions
---------------------------------------------------------------------
% Inc/(Dec)
As Constant
Quarters ended June 30, 2000 1999 Reported Currency*
---------------------------------------------------------------------
U.S. $1,380.0 $1,379.8 - n/a
Europe 1,190.0 1,237.1 (4) 5
Asia/Pacific 476.5 448.7 6 7
Latin America 225.8 165.8 36 40
Other** 288.3 175.7 64 66
$3,560.6 $3,407.1 5 8
---------------------------------------------------------------------
% Inc/(Dec)
As Constant
Six months ended June 30, 2000 1999 Reported Currency*
---------------------------------------------------------------------
U.S. $2,589.6 $2,531.1 2 n/a
Europe 2,361.0 2,393.3 (1) 7
Asia/Pacific 1,003.1 870.3 15 15
Latin America 454.7 329.4 38 41
Other** 496.0 318.1 56 55
$6,904.4 $6,442.2 7 10
* Excluding the effect of foreign currency translation on reported
results.
** The Other segment revenue related to Other Brands for the second quarter
and six months 2000 was $101.2 million and $138.5 million, respectively.
MCDONALD'S CORPORATION OPERATING MARGINS
OPERATING MARGINS - MCDONALD'S RESTAURANT BUSINESS**
--------------------------------------------------------------------------
% Inc/(Dec)
Percent Amount As Constant
Quarters ended June 30, 2000 1999 2000 1999 Reported Currency*
--------------------------------------------------------------------------
Company-operated
U.S. 17.5% 19.4% $139.5 $156.2 (11) n/a
Europe 18.6 19.4 173.9 189.6 (8) (1)
Asia/Pacific 16.3 16.6 69.2 65.2 6 7
Latin America 12.9 13.1 23.1 15.8 46 49
Other 15.4 16.2 22.5 22.1 2 3
Total 17.3% 18.4% $428.2 $448.9 (5) (1)
Franchised
U.S. 81.4% 82.5% $473.4 $472.6 - n/a
Europe 78.2 79.8 201.1 208.4 (4) 8
Asia/Pacific 82.1 83.5 42.8 45.9 (7) (2)
Latin America 73.3 77.5 33.8 34.7 (3) -
Other 78.9 79.3 32.5 31.0 5 6
Total 80.1% 81.5% $783.6 $792.6 (1) 2
---------------------------------------------------------------------------
% Inc/(Dec)
Percent Amount As Constant
Six months ended June 30, 2000 1999 2000 1999 Reported Currency*
---------------------------------------------------------------------------
Company-operated
U.S. 17.1% 18.1% $ 257.1 $ 267.0 (4) n/a
Europe 18.1 18.5 335.0 348.5 (4) 4
Asia/Pacific 17.1 16.4 153.4 125.3 22 21
Latin America 12.7 13.6 45.6 32.7 39 43
Other 14.5 14.8 40.4 36.5 11 10
Total 17.0% 17.6% $ 831.5 $ 810.0 3 6
Franchised
U.S. 80.3% 81.3% $ 875.1 $ 858.7 2 n/a
Europe 77.8 78.5 397.1 397.1 - 12
Asia/Pacific 82.4 83.4 88.6 89.0 - 2
Latin America 74.5 77.9 71.7 69.3 3 5
Other 78.0 77.9 60.8 55.7 9 8
Total 79.4% 80.4% $1,493.3 $1,469.8 2 5
* Excluding the effect of foreign currency translation on reported
results.
** Operating margin information relates to McDonald's restaurant business
and excludes Other Brands.
MCDONALD'S CORPORATION FINANCIAL INFORMATION
COMPANY-OPERATED MARGINS AS A PERCENT OF SALES -
MCDONALD'S RESTAURANT BUSINESS*
-------------------------------------------------------------------------
Quarters ended June 30 Six months ended June 30
2000 1999 2000 1999
-------------------------------------------------------------------------
Food & paper 33.8 34.2 34.0 33.9
Payroll & employee
benefits 25.4 24.9 25.4 25.5
Occupancy & other
operating expenses 23.5 22.5 23.6 23.0
Total expenses 82.7 81.6 83.0 82.4
Company-operated margins 17.3 18.4 17.0 17.6
* Operating margin information relates to McDonald's restaurant business
and excludes Other Brands.
MCDONALD'S CORPORATION RESTAURANT INFORMATION
SYSTEMWIDE RESTAURANTS
-------------------------------------------------------------------------
At June 30, 2000 1999 Inc/(Dec)
-------------------------------------------------------------------------
U.S.* 12,658 12,490 168
Europe
Germany 1,044 947 97
England 901 820 81
France 812 744 68
Italy 257 211 46
Spain 238 194 44
Sweden 213 186 27
Netherlands 204 190 14
Poland 168 141 27
Other 1,295 1,125 170
Total Europe 5,132 4,558 574
Asia/Pacific
Japan* 3,347 2,985 362
Australia 684 672 12
Taiwan 327 310 17
China 272 235 37
Philippines 228 201 27
South Korea 200 145 55
Hong Kong 169 158 11
Other 604 555 49
Total Asia/Pacific 5,831 5,261 570
Latin America
Brazil* 998 771 227
Argentina 221 179 42
Mexico 183 150 33
Other 521 454 67
Total Latin America 1,923 1,554 369
Other
Canada* 1,126 1,093 33
Other McDonald's 466 385 81
Other Brands 910 25 885
Total Other 2,502 1,503 999
Systemwide restaurants 28,046 25,366 2,680
Countries 119 115 4
* Includes satellites in 2000: U.S. 1,017; Japan 1,386; Brazil 503; Canada
268. In 1999: U.S. 1,055; Japan 1,189; Brazil 355; Canada 237.
MCDONALD'S CORPORATION RESTAURANT INFORMATION
RESTAURANT ADDITIONS
--------------------------------------------------------------------------
Quarters ended June 30 Six months ended June 30
2000 1999 2000 1999
--------------------------------------------------------------------------
U.S. 34 28 29 18
Europe 121 88 189 137
Asia/Pacific 126 132 176 206
Latin America 73 121 134 149
Other - McDonald's 23 17 18 31
Other Brands 673* 5 694* 7
Systemwide additions 1,050 391 1,240 548
* Primarily relates to the acquisition of Boston Market in second quarter
2000.
SYSTEMWIDE RESTAURANTS
-----------------------------------------------------------------------
At June 30, 2000 1999 Inc/(Dec)
-----------------------------------------------------------------------
US
Operated by franchisees 10,028 9,889 139
Operated by the Company 1,813 1,803 10
Operated by affiliates 817 798 19
12,658 12,490 168
Europe
Operated by franchisees 2,871 2,486 385
Operated by the Company 2,040 1,866 174
Operated by affiliates 221 206 15
5,132 4,558 574
Asia/Pacific
Operated by franchisees 1,563 1,403 160
Operated by the Company 1,343 1,180 163
Operated by affiliates 2,925 2,678 247
5,831 5,261 570
Latin America
Operated by franchisees 1,023 818 205
Operated by the Company 792 456 336
Operated by affiliates 108 280 (172)
1,923 1,554 369
Other
Operated by franchisees 1,123 969 154
Operated by the Company 1,293 420 873
Operated by affiliates 86 114 (28)
2,502 1,503 999
Systemwide
Operated by franchisees 16,608 15,565 1,043
Operated by the Company 7,281 5,725 1,556
Operated by affiliates 4,157 4,076 81
28,046 25,366 2,680
